http://money.cnn.com/2013/01/27/news/economy/housing-economic-growth/index.html?iid=SF_E_Highlight
According to this article, housing is a large part of the economic growth in 2013, among consumer spending, an increase in domestic energy production, and stimulus from the Fed. As stated by a chief economist of Nuveen Asset Management, the home building activity will be the strongest component of our economy this year. Since in the past couple of years there have been an excess supply of houses, the demand has caught up and they are much more balanced. In this rebound, there are record low mortgage rates, rising home prices, and a decrease in foreclosures, which have together brought buyers back into this specific market. In the end, this is estimated to create more than 1 million new jobs.
I think there is a reason that there is so little supply relative to demand. It is the result of too many homeowners being so "weighed down" financially by their home, that they cannot sell them. Building more will just create an artificial bubble again.
ReplyDeleteWith the housing market having a large impact on economic crash. It is not strange that the market would eventually find its way back to equilibrium levels, and help the economy recover with it. This is a great sign that our economy is recovering back to normal.
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